Strong demand for mortgage credit in the first quarter of 2019
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Excluding refinancings, the number of loan applications increased by 6.5% in the first quarter of 2019 compared to the first quarter of 2018. There was also an increase in amount, by just over 11%.
In the first quarter of 2019, approximately 62,000 mortgage loan agreements were concluded for a total amount of approximately EUR 8.3 billion (excluding refinancings). This is an increase in the number of credit agreements granted by 4.3% compared to the first quarter of last year. In terms of amount, 7.3% more credit was provided than then. This is evident from the statistics on mortgage credit that the Professional Association of Credit (BVK) published today.
De 58 leden van de UPC vertegenwoordigen samen zo’n 90% van het totaal aantal nieuw verstrekte hypotheekleningen (de zogenaamde productie). Het totale uitstaande hypotheekkrediet van UPC-leden bedraagt eind maart 2019 circa € 220 miljard.
Supporting role of the financial sector in achieving the climate objectives
For some time now, the Belgian financial sector has been working together with the European Mortgage Federation (EMF) and supported by the European institutions on the development of an “Energy Efficient Mortgages Action Plan” (EeMAP). This action plan is intended to create a framework within which European banks and lenders can develop credit products that encourage European citizens to have the necessary energy-saving works carried out.
We are currently working hard on the development of this action plan at Belgian level and consultations are taking place with governments and other stakeholders at both national and regional level to arrive at solutions that guarantee a smooth credit process for both consumers and creditors.
2018 vs 2019:
- Below you will find the most important findings for the first quarter of 2019 compared to the first quarter of 2018. These figures do not take refinancing into account.
- The number of credit applications (excluding those for refinancing) increased by 6.5% in the first quarter of 2019 compared to the first quarter of 2018. The amount of credit applications also increased by more than 11%. 96,000 credit applications were submitted for a total amount of almost EUR 14 billion.
- Mortgage loans granted increased by just over 4% in the first quarter of 2019, while the corresponding amount increased by just over 7%. Approximately 62,000 loans were thus granted for a total amount of EUR 8.3 billion (excl. refinancings).
- There has been an increase in lending across all purposes. The number of loans for purchase with renovation showed the strongest increase in percentage terms, namely +26% or 570 loans more than in the first quarter of 2018. The number of loans for the purchase of a home (+1,423) was in the first quarter of 2019. 4.4% higher than in the first quarter of 2018. The number of construction loans (+180) was 2.3% higher, as was the number of loans for the renovation of a home (+220), which increased by 1.7%. % knew. The number of loans for other purposes (+160) increased by 3.6%.
- The number of external refinancings (+290) increased by almost 4.7% in the first quarter of 2019 compared to the first quarter of 2018. More specifically, 6,500 external refinancings were provided in the first quarter of 2019 for a total amount of slightly more than EUR 800 million.
- The average amount borrowed for the purchase of a home stabilized in the first quarter of 2019 at around EUR 160,000. The average amount for a construction loan decreased slightly in the first quarter of 2019 to approximately EUR 168,500. The average amount of credits for purchase + renovation stabilized around EUR 195,000.
- In the first quarter of 2019, approximately 3 in 4 borrowers opted for a fixed interest rate or a variable interest rate with an initial interest rate fixation period of at least 10 years. The market share of loans with an annually variable interest rate decreased slightly and accounted for 6% of the loans granted.
Number of credit applications
The number of credit applications, excluding those relating to external refinancing, increased by 6.5% during the first quarter of 2019 compared to the same quarter of last year. The underlying amount of loan applications also increased, by just over 11%.
The number of credit applications for the purchase + renovation of a home (+1,165, or +27.6%) increased the most. Loan applications for the purchase of a home (+4,046, or +8%) and for other purposes (+1,262, or +24%) also increased. The number of loan applications for the construction of a home (-446, or -3.7%) and for the renovation of a home (-146, or -0.8%) fell.
Garage, bouwgrond, …
In addition, in the first quarter of 2019, the number of applications for external refinancing fell by 7.9%.
Number of loans granted in the first quarter
In the first quarter of 2019, the number of loans granted, excluding external refinancings, increased by 4.3% compared to the first quarter of 2018. The corresponding amount increased by approximately 7%.
The total amount of loans granted in the first quarter once again reaches the highest level ever in a first quarter. This was also the case in previous trimesters.
Increase in the number of credits, regardless of destination
Approximately 62,000 new loans were granted in the first quarter of 2019 for a total amount of approximately EUR 8.3 billion - excluding external refinancings.
Compared to the first quarter of last year, an increase was observed across all destinations.
The number of loans for purchase with renovation showed the strongest increase in percentage terms, namely +26% or 570 loans more than in the first quarter of 2018. The number of loans for the purchase of a home (+1,423) was in the first quarter of 2019. 4.4% higher than in the first quarter of 2018. The number of construction loans (+180) was 2.3% higher, as was the number of loans for the renovation of a home (+220), which increased by 1.7%. % knew. The number of loans for other purposes (+160) increased by 3.6%.
In addition, the number of external refinancings also increased by 4.7% in the first quarter of 2019. In particular, 6,500 external refinancings were provided for a total amount of just over EUR 800 million.
Average amount of a credit for the purchase of a home stabilizes around EUR 160,000
The average amount of a loan for the purchase of a home stabilized in the first quarter of 2019 at around EUR 160,000.
The average amount of a loan for the purchase of a home + renovation also remained approximately unchanged in the first quarter at EUR 195,000.
The average amount of a loan for the construction of a home fell slightly during the first quarter of 2019 to EUR 168,500.
3 out of 4 borrowers opt for a fixed interest rate
In the first quarter of 2019, 3 in 4 borrowers (76.5%) opted for a fixed interest rate or a variable interest rate with an initial interest rate fixation period of at least 10 years. About 17.5% of borrowers opted for a variable interest rate with an initial interest rate fixation period between 3 and 10 years. As in the previous quarter, the number of borrowers who opted for an annually variable interest rate fell slightly to approximately 6%.
Taking into account the still extremely low interest rates (see graph below), Belgian consumers continue to largely opt for certainty. Due to the historically low level of annually variable interest rates, approximately 6% of borrowers have opted for this. But even in the event of an annually changing interest rate, the consumer is strongly protected by the legislation. For example, the variable interest rate after adjustment to the evolution of the applicable reference indices can never amount to more than double the initial interest rate.
